The long-awaited security tokenization rule of the US Securities and Exchange Commission (SEC), which has the potential to create a radical change in financial markets, has become the focus of discussions with claims that synthetic tokens will also be allowed in the market. Following these allegations, SEC Commissioner Hester Peirce took an unusual step on the issue and made a public statement before the regulation became official.
Peirce emphasized that the door is not opened to synthetic tokens
Hester Peirce, who has been advocating for more flexible regulations on crypto assets for a long time, shared posts on her social media account on two different days regarding the scope of the upcoming new rule. In these messages, Peirce appeared to state that the new regulation will be limited only to digital representations of securities that can currently be bought and sold in the secondary market, and will not lead to synthetic security tokens.
“Scope will be limited, covering only digital representations of the actual stock that an investor can purchase on the secondary market today; synthetics will not be permitted,” Peirce said.
The concept of “synthetic token” here refers to digital assets that are created by third parties and produced with reference to the original share certificate, but do not include shareholder rights such as voting rights.
Mini dictionary: Synthetic token is a type of crypto asset created solely based on the price of an asset, without having a real existence in the digital environment or carrying its rights.
Some media outlets fueled the debate
With the news published this week, Bloomberg suggested that the SEC may also pave the way for synthetic tokens to be traded on decentralized crypto platforms. Upon the discussions that intensified with these claims, Peirce thanked the interest in the process but stated that the issue should not be exaggerated. It was stated that Peirce did not respond to requests for comment regarding his statements.
New rule could be a milestone in the crypto world
The expected new regulation is one of the most comprehensive crypto-focused steps in SEC history to date. Commission Chairman Paul Atkins shared at the DC Blockchain Summit held in March that comprehensive proposals that could grant temporary exemptions for certain activities in the crypto field are being worked on, and that, thanks to these steps, it is planned to create a “regulation threshold” for sector entrepreneurs to mature.
Atkins also underlined that a “fundraising exemption” could be created that would allow startups to raise funds up to a certain amount, and an “investment contract exemption” could be created to exclude some crypto assets from the definition of regulated securities after the relevant teams complete the implementation process. It was stated that these suggestions could make it possible to carry out activities in the field in question without the obligation to register for four years.
In his statement, Atkins pointed out that Commissioner Peirce made a significant contribution to the regulatory process.
The role of Congress and legal infrastructure work
While the SEC is preparing new rules for crypto assets together with the Commodity Futures Trading Commission (CFTC), which oversees commodity markets, it is reported that Congress is preparing to permanently legislate these titles with the Digital Asset Market Clarity Act. In this context, both SEC Chairman Atkins and CFTC Chairman Mike Selig point out the importance of placing crypto regulations on a solid framework with comprehensive legislation.
“Only Congress can ensure that regulation in this area is future-proof through comprehensive market structure legislation,” Atkins said in his March speech.
